Mar 28, 2012

Agent Incentives: What works - What doesn't

Some home sellers believe that offering a bonus to a buyer's agent will help sell their home. They offer all kinds of incentives to Realtors in hopes that it will give them the extra edge over other homes. Here are a few examples of incentives I've seen offered to agents in the past couple of years:
  • Bonus Money. Often $1,000 to $5,000. These don't attract as much interest as you might think. Sellers are probably not aware that the buyer's agent is required to disclose this bonus to their clients who will likely want it reflected as a discount to their purchase price instead of a bonus to their agent. The seller might as well offer a price reduction. I've never kept the bonus incentive and have passed it on to my clients when legally possible. Any monetary bonus a buyer's agent actually receives will be shared with their broker.
  • A Trip. Builders selling new construction sometimes offer these to agents who sell more than 1 of their properties. But usually the buyer's agent is entered in to a drawing for a trip along with other agents selling their properties. The odds aren't good enough to make most agents drive people to that particular builder. But at least the agent doesn't have to split the trip with their broker. So a trip is often more enticing than cash to an agent.
  • An ipad. This is a popular incentive right now. But if I really want an ipad, I may already have one. If I don't, this isn't an incentive. And like the cash offer, it must be disclosed to the buyers - who may expect something as well.
  • Weird stuff - the strangest one I've seen was an offer of an Arby's coupon for a discount sandwich to agents who brought their clients to see the home. Or maybe it was the offer of a scented candle that one home was trying entice agents with. Realtor events and giveaways are one way to attract agents in the door. But requiring an agent to schedule a showing and bring their client in order to receive a puny prize is a waste.
The truth is that none of these agent incentives works well. If a property fits my clients' needs, then I'm going to show it to them. If it doesn't, then we probably aren't walking in the door. None of the incentives I've ever seen has been enough to encourage me to sell my buyers a home that they wouldn't otherwise want.

What works? The property is in the right location, the right condition and at the right price. It is presented well in the MLS, on-line and in person. AND it is easy to access. That is what will make an agent want to sell your property.[where: 75230]

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